Predicting the future is one of the main skills a company can have to better plan. But anticipating what is to come is based on data and strategic demand planning .
In some cases, this is more obvious, such as the demand forecast made by e-commerce companies for the Black Friday period. But the truth is that in every type of company there are periods of high and low sales that will affect sales, and predicting this in advance allows you to prepare to avoid losses.
The importance of strategic demand planning
Strategic planning works as a map for the organization. It is used to make more assertive decisions, always in pursuit of the company’s objectives. It also serves as a guide for the actions of each sector, which, in turn, also needs to have its own strategies.
In the case of demand, the logic is the same, but the focus is on the market, the target audience and their interests and needs.
Understand why it is important to focus on this type of planning:
Resource optimization
One of the main challenges for companies that work with product sales is avoiding stagnant stock and the most efficient way to do this is with adequate forecasting.
This makes it possible to see more clearly which months or weeks will have greater demand, and adjust this to production, avoiding waste of materials and other resources used.
Cost reduction
Of course, this allows us to reduce production and storage costs, but also in other areas involved in the process, such as the commercial and marketing sectors.
More competitiveness
Anticipating demand also allows companies to prepare for competition. Competitors will look for ways to anticipate market behavior, and those who plan better will be better prepared for this and will be able to more effectively meet consumers’ wants and needs.
How to do strategic demand planning?
The company needs reliable sources for this. Therefore, the past becomes the main reference, and looking at past months and years helps in this process.
But it also involves a process of market intelligence, monitoring trends and considering social factors and other external contexts to define planning efficiently.
Here’s how to do good demand planning in five steps:
1- Data collection
This is the most important step, as it involves both the company’s history and market information. Ideally, you should have a team and this is probably the process that will take the longest.
Information that should be gathered includes:
- Sales history from previous years and seasonal periods;
- Specific information on top-selling products;
- Market trends for the next period and how this will influence consumers;
- Issues related to society, especially economic data that may influence demand;
- Internal company data, such as production capacity.
2- Management tool
Technology continues to update and transform at a rapid pace, and today there are several options that can help people collect and organize this data. Whether it’s using artificial intelligence, spreadsheets or more complete systems like ERPs, it’s important to have these solutions to organize and visualize this data.
Furthermore, with management tools it is possible to generate graphs and even have initial information about future demands.
3- Making predictions
With this information, it is now possible to make more complete predictions about the coming year. This collected and evaluated data offers insights into the months of the year with the highest sales, the most sought-after products, and the time of year when they will be most sought after.
With this, the team is able to formulate different scenarios, such as optimistic, pessimistic and moderate, to prepare for different situations.
4- Creating strategies
Only with the information gathered and the possible scenarios evaluated is the company able to make strategic planning. Here, the actions that will be taken based on the previously evaluated data are defined, allowing each area to make its own planning.
This way, the company understands the changes that will occur throughout the year and it is possible to create a schedule of actions aligning all areas.
5- Analysis and adjustments
When it comes to forecasts, however accurate they may be, they are still susceptible to unforeseen events. Furthermore, during the process, certain strategies may not work, so it is also necessary to develop ways to monitor and analyze this planning, leaving room for adjustments as demand is confirmed.
This process must be carried out regularly, whether monthly or quarterly, so that the company always has control over the results of the actions taken and can make specific changes without harming production or results.
